The Anchor Mechanism Objective: The new system must indicate with sufficient accuracy the score a golfer is reasonably capable of achieving on any course around the world, playing under average conditions (Principle 3).

- At various times in the past, incremented systems and average based systems have operated in Australia. - The current CONGU incremented system is based on the old Australian Golf Union incremented system. Why did GA choose an average based system over an incremented based system?

- Golf Australia’s move in 2010 to an average based system was not really rooted in considered assessment of the perceived merits of this type of calculation mechanism. - GA was attracted to the concept of Slope and it was really that that drove it to the USGA system. Why did GA choose an average based system over an incremented based system? Contd.

- Consideration of the non-Slope components of the USGA system tended to occur only once a strong pre-disposition had already been developed to the USGA system (because it included Slope). - It was generally assumed that as the USGA system operated in the US, it would provide a superior handicapping solution for Australia. Modelling of it in the Australian context wasn’t seen to be worthwhile. Why did GA choose an average based system over an incremented based system? Contd.

Most golfers play regularly in large-field net competitions. The average annual number of competition rounds per capita in Australia is approximately 30 (and it is not uncommon to encounter players who play rounds per annum). Play is strictly in accordance with the Rules of Golf. What are the key features of the Australian golf culture (that contrast with the US golf culture)?

- In April 2010 GA commenced its move to the USGA Handicap System by bringing into effect the 10 of 20 x 0.96 rolling average component. - Full introduction of the USGA system at this time was not practicable due to software considerations. Implementation of the ‘main’ Slope component was scheduled to occur at a later point as it required far greater GOLF Link amendment than was needed for the rolling average implementation. How and why was the Anchor conceived?

Australian Experience of 10 of 20 x There were many reports from clubs of the creation of a material bias towards high markers in large-field net competitions. - Handicaps were very susceptible to rapid extreme outward movement due to runs of bad form. How and why was the Anchor conceived? Contd.

Aust Experience of 10 of 20 x 0.96 (contd.) - Many cases of for example 5-6 markers rapidly sliding out to handicaps of (Or of the handicaps of higher markers rapidly increasing by 8-10 strokes.) - When the form of these players re-aligned to underlying ability (and with the player still on the new handicap), Stableford scores of approx. 45 points (net 63 for par of 72) would comfortably ensue. How and why was the Anchor conceived? Contd.

Aust Experience of 10 of 20 x 0.96 (contd.) - Net events were commonly being won with scores of Stableford points (ie net for par of 72). - Players commonly needed scores of 42 Stableford points (net 66 for par of 72) to win the most minor prize (eg 1 golf ball). How and why was the Anchor conceived? Contd.

Aust Experience of 10 of 20 x 0.96 (contd.) - Winning scores were becoming realistically unachievable for low markers which led to them feeling materially disengaged from the club culture. - Very minor prizes (eg 1 golf ball) had become difficult to win by players whose handicaps were commensurate with their underlying ability. - Widespread disenchantment with GA. How and why was the Anchor conceived? Contd.

Analysis of 10 of 20 x 0.96 – Identifying the basis of the Problems - PROBLEM 1: Statistical analysis confirmed that the 10 of 20 x 0.96 settings had produced a material bias towards high markers in large field net events. How and why was the Anchor conceived? Contd.

Analysis of 10 of 20 x 0.96 – Identifying the basis of the Problems (contd.) - PROBLEM 2: There was nothing to tie a handicap to previous performance or underlying ability. As a result, an entirely new handicap could be created every 20 rounds. (And many Australian golfers play 20 rounds in six weeks.) How and why was the Anchor conceived? Contd.

GA Problems in the Context of Principle 3 of the Worldwide Handicapping System (Principle 3: The new system must indicate with sufficient accuracy the score a golfer is reasonably capable of achieving on any course around the world, playing under average conditions.) - GA View: Our free-floating handicaps were too susceptible to becoming materially worse (from time to time) than a player’s underlying ability. How and why was the Anchor conceived? Contd.

GA’s Solution Development Process - The first step was to compare the then-current trends in handicapping and net competition results patterns with the aspirations outlined in the First Principles of the GA Handicap System. How and why was the Anchor conceived? Contd.

GA’s Solution Development Process (contd.) - The most pertinent principle in this context was Principle 1: The GA Handicap System should be primarily tailored for competition golf and afford each player in the field a reasonable prospect of winning or placing well if that player plays reasonably better than their handicap. - We took the clear view that this principle was not being realised. How and why was the Anchor conceived? Contd.

GA’s Solution Development Process (contd.) - We believed we needed two distinct solutions. - Firstly, we sought to develop a means for reducing all handicaps (and higher handicaps more so than lower handicaps). The objective of this was to redress the bias that had manifested towards high markers, and also to soften the new overly-good net scoring patterns. After extensive modelling we arrived at the 8 of 20 x 0.93 settings. How and why was the Anchor conceived? Contd.

GA’s Solution Development Process (contd.) - Secondly, we sought to develop a mechanism to prevent handicaps from freely floating. - After consideration of an array of options, we decided on the Anchor - In designing the proposed Anchor regulations, we made subjective judgements as to what values would be appropriate. - These values were then statistically modelled before being confirmed as policy. How and why was the Anchor conceived? Contd.

- THE ANCHOR: A player's handicap is prevented from increasing by more than 4 strokes above their best exact handicap from the previous 12-month rolling period. - Every time a player has a round processed through GOLF Link, GOLF Link will re-assess their Anchor point. - On the following slide is an example of an Anchored player’s GOLF Link record. How does the Anchor system work and what information is taken into consideration?

Summary of GA Process for Manual Re- assessment of a Player’s Handicap In the vast majority of cases, Committees should be very wary of lifting a player’s handicap in response to a loss of form. The likely outcome is that the player’s regular form will return and their new handicap will enable them to return an exceptional net score that will leave correctly-handicapped members feeling disgruntled. That said, Committees are encouraged to consider reviewing the handicaps of players whose circumstances reflect the following:  Where a player is in the process of recovering from a significant long-term injury or illness. Procedure in place to satisfy exceptions.

Summary of GA Process for Manual Re- assessment of a Player’s Handicap (contd.)  Where a player has changed clubs and finds the new course to be far more challenging for them for whatever reason than the previous course.  Where a player has been Anchored due to them reaching a handicap that is clearly better than any other handicap they have achieved for at least two years AND that the Committee believes was clearly better than their underlying ability. Procedure in place to satisfy exceptions. Contd.

Summary of GA Process for Manual Re- assessment of a Player’s Handicap (contd.)  Where the handicap for whatever reason (eg due to advancing age) is not commensurate with the player’s underlying ability.  As has always been the case, if a club feels a player’s handicap may warrant adjustment for ANY reason (including to cater for one of the above sets of circumstances), GA strongly advises Clubs to consult with their State Association before any decision is taken. Procedure in place to satisfy exceptions. Contd.

- The Anchor regulation is well understood publically. - The Anchor regulation is generally well accepted. - The major problem we have had with it is that without DSR, the Anchor is highly seasonal. - The concomitant outcome of this is that we end up with a far higher proportion of golfers Anchored from time to time than we believe is desirable. Problems encountered / general level of acceptance / understanding.

- During the times when seasonal Anchorage is high, we have had many reports from club administrators of disgruntled golfers. - The Anchor can be an unusually emotive issue for some Anchored players – they feel it unfairly restricts their capacity to compete. - That said, most Anchored players seem to simply accept the regulation (and in many cases are happy to avoid the embarrassment of a further-increasing handicap). Problems encountered / general level of acceptance / understanding (Contd.)

- Our assessment is that whilst the golf industry widely believes that the Anchor adds material value to the handicap system, there is nonetheless a firm view that having a material proportion of golfers Anchored at any one time is highly undesirable. - But is seasonal Anchorage a genuine phenomenon? - The following slide shows the proportion of Anchored players at a typical Australian club. Problems encountered / general level of acceptance / understanding (Contd.)

- The slide clearly demonstrates that seasonal Anchorage is real. - But it is also worth asking the following question: Is seasonal Anchorage likely to be an ongoing phenomenon? - To answer this question, we’ll look at a graph that shows data from our same typical Australian club, but this time modelling the regulations of the complete new GA Handicap System. [See following slide.] Problems encountered / general level of acceptance / understanding (Contd.)

-So we can see that seasonal Anchorage is a problem that will soon be largely eliminated. -(Note: Approx 70% of the reduced Anchorage impact is caused by DSR (the remainder is caused by a mix of Slope and the Stableford Handicapping Adjustment).) Problems encountered / general level of acceptance / understanding (Contd.)

-4-stroke Anchor introduced September Note i: Being mindful as we come into the Australian winter of the seasonal Anchorage phenomenon, as a temporary measure the Anchor was increased to 5 on 14 May Note ii: As demonstrated on an earlier Slide, DSR will largely remove seasonal Anchorage. As a result, we will reconsider the Anchor figure once we’ve had a chance to review data and feedback. The implementation stages that have been encountered to date.

-GA is mindful that the introduction of DSR will materially improve the efficiency of the Anchor regulation. -We can model this impact now but we feel that before making any judgements it will be prudent to wait to see the real data outputs when the new system is fully operative. -Our final determinations will be heavily influenced by this data and by industry feedback. What the final number will be and why.

-The Anchor is essentially a simple limit to the rate at which a player’s handicap can rise within a stipulated period of time. Why the Anchor is preferable to a simple limit to the rate at which a player’s handicap can rise, such as 2.0 in any 12- month period.

QUESTIONS